Reflection

CALIFORNIA MANAGEMENT REVIEW VOL. 53, NO. 2 WINTER 2011 CMR.BERKELEY.EDU 27 Global Clusters of Innovation: THE CASE OF ISRAEL AND SILICON VALLEY Jerome S. Engel Itxaso del-Palacio Innovation is a global process. Innovation, especially among early stage start-up ventures, is generally understood to accelerate when such ventures are in close proximity groupings known as Clusters of Innovation (COI). Clusters are not isolated islands. The most successful are often the most globally connected, utilizing linkages with other like clusters to leverage resources, access markets and accelerate the innovation process. These linkages, and the networks they construct, allow participants to reap benefits beyond those derived from proximity groupings and achieve efficiencies and innovation on a global scale. In a previous article published in Business Horizons, we defined a framework for understanding the rapid emergence of new patterns of innovation and commercialization in existing or emerging COI and the global connections often established among them. We define a COI as an environment that favors the creation and development of high potential entrepreneurial ventures and is characterized by heightened mobility of resources, including people, capital and information.1 The framework builds upon the cluster literature, allows for a deeper understanding of the mechanisms behind the formation of COI, and most importantly their symbiotic relationship to other COI. It explains how individuals and organizations in a COI benefit from cluster externalities but differentiates COI from pure agglomerations of interconnected organizations working in the same industries (industrial or Porterian clusters). It also explains how individuals, companies, universities and other players in COI are connected to other, sometimes globally distant COI, through diverse mechanisms including weak ties,2 durable bonds and covalent bonds. These linkages lead to the creation of Networks of Clusters of...